Building a Fast-Moving Momentum Indicator Using Pure Price Action
If you want to build a fast-moving indicator based entirely on the Open and Close of the current and previous candles, you are essentially building a purely price-action momentum system. By comparing the Current Candle (0) and the Previous Candle (1), you can distill market movement into four primary color combinations. Within those combinations, the exact placement of the Opens and Closes dictates the strength of the momentum. Here are the most actionable logical conditions you can build, mapped out using clear IF / THEN / AND / OR logic. 1. Previous RED ➡️ Current GREEN (Bullish Reversal) This combination signals a potential shift from selling to buying. The strength of the signal depends entirely on how high the current close is compared to the previous candle. Standard Reversal: IF (Previous is RED) AND (Current is GREEN) AND (Current Close > Previous Close) THEN Bullish Momentum Shifting. Strong Bullish Engulfing (Total Reversal): IF (Pr...